Value Added Tax Is Type Indirect Tax Levied By The State Government On The Prescribed Goods Under Respective State Act. E.G Mvat Act 2002(For Maharashtra).

VAT Registration

Why to obtain Registration Certificate?
• Obtaining of registration certificate is statutory obligation of every dealer, who is liable to pay tax under the Act.
• It empowers the dealer to collect tax.
• A registered dealer gets the benefits of set off (input tax credit)
• Business without registration invites penalty/prosecution.

Who should apply for the Registration?
The dealer who attains or crosses prescribed turnover of purchase or sale should apply for registration under VAT Act within 30 days from the date on which turnover crossed the prescribed limit.
Once a dealer exceeds the prescribed turnover and fulfils the conditions as mentioned in table below, then the liability to pay taxes under the Act commences from the time of transaction by which the turnover exceeds the prescribed limit.

E.G. In Maharashtra Trader Of Dealer Compulsorily Requires Registration If His Turnover Of Sale Or Purchases Crosses Rs.10 Lakh. Even One Can Voluntarily Register Himself With Vat.

Category of Dealer /TRADER Turnover Turnover of taxable good purchase or sold
Importer Rs. 1,00,000 Rs. 10,000
Other than Importer Rs. 10,00,000* Rs. 10,000

What happens if not applied in time for registration?
When a dealer does not apply within 30/ 60 days from the date of exceeding the prescribed turnover of purchases or sales than certificate of registration will be issued with effect from the date of uploading of the application. Therefore, from the date of starting of business till the date of uploading of the application, the dealer will be treated as unregistered.

Penalty for un-registered dealers
If dealer does not apply in time and remains unregistered, it is an offence under the Act.

Under which circumstances voluntary registration is beneficial
1) When dealer is doing manufacturing activity and require to install plant and machinery. It is always beneficial to get register under MVAT as immediately after the voluntary registration he can claim the set off on the plant and machinery purchased by him. If voluntary registration is not done; VAT paid on plant and machinery purchase will be in vain as dealer can not claim the set off during unregistered period.
2) When dealer is trader and he want to purchase the large quantity of goods for the trading purpose before the sales starts. In such situation; voluntary registration is necessary as after registration dealer can claim the set off of the goods purchase.

Under which circumstances compulsory registration is beneficial
When dealer is the small trader and he is not going to purchase the bulk material say less than Rs. 10, 00,000), then there is no need for voluntary registration. The benefits of compulsory registration are as below:-

1) Dealer is not required to pay the deposit of Rs. 25,000 and registration fees require to pay is Rs. 500 only.
2) Dealer can claim initial exemption of tax liability on sales up to Rs. 10,00,000* under section 3(2)of MVAT Act.

MVAT Registration is compulsory if turnover exceeds prescribe limit as mention above. In default of non-registration penal provisions of MVAT act are applicable.
This figure is substituted for the figure “5, 00,000” by Mah. Act No.XXVII of 2014 dt.26.6.2014.

Time Limit to apply for Registration

Type of Registration Time Limit
Exceeding prescribed turnover limit Within 30 days from date of exceeding turnover
Change in constitution Within 30 days of such change
Transfer of Business Within 30 days of such transfer
Transfer of Business by way of succession in case of death Within 60 days of such incidence

Every Dealer Or Trader Registered Under This Act Have To Compulsorily File Returns To Government Even Though Turnover Is Nil During The Period.
One Can Check The Periodicity Of Return By Login To Site.


Period   Periodicity Determination Criteria Due Date Of Payment / Return
1) In case of 1st Year (a) From 1st day of April of the year or from the date of event dealer becomes liable to pay tax till the end of quarter in which the certificate of registration is granted Within 21 days from the end of the quarter.
(b) Thereafter quarterly As above
2) In case of subsequent year (a) If tax liability during the previous year exceeded Rs. 10 lakhs or refund during the previous year exceeded Rs.1 crore. Monthly Within 21 days from the end of every month.
(b) If tax liability during the previous year is between Rs. 1,00,001 to Rs. 10 lakhs or refund during the previous year is between Rs. 10,00,001 and Rs. 1 crore. Quarterly Within 21 days from the end of every quarter.
(c) Cases not covered in (a) & (b) above Six Monthly Within 21 days from the end of six months.
3) In case of the last year (a) Returns as per 2 above Depends upon previous year liability
(b) Last return from the first day of month, quarter or half year as the case may be till the date of closure discontinuation of business. Depends upon previous year liability.
4) Dealers covered under composition scheme (a) Retailer Half Year
(b) Restaurant Depends upon previous year liability.
(c) Bakery Depends upon previous year liability.
(d) Dealer of second hand motor vehicles Depends upon previous year liability.
(e) Caterer
5) For other types of Dealers (a) Motor spirit dealer
(b) Certificate of entitlement dealer Quarterly
(c) Any other dealer Depends upon previous year liability.
6) Return of tax deducted at source Within three months from the end of relevant financial year Payment to be made within 21 days from end of month in which tax is deducted

Consequences Of Non Filling
A defaulter under this category is compelled to face both the monetary and nonmonetary penalties.

A late fee of rupees 5,000 for delayed returns was introduced with effect from 1st August 2012 under the Maharashtra Value Added Tax Act, 2002 by virtue of sub-section (6) inserted in section 20.